Bitcoin’s RSI Divergence Hints At Reversal Near $83.5K Resistance

Bitcoin's falling wedge pattern suggests a possible breakout with resistance near $83.5K.

RSI divergence signals weakening downside pressure and hints at a potential reversal.

Bitcoin’s price action and RSI divergence could drive a move to retest the $83.5K resistance.

Bitcoin is forming a falling wedge pattern on its daily chart, suggesting a potential reversal in the near future. As Bitcoin continues to drop, the Relative Strength Index (RSI) shows a bullish divergence. The current price movement and technical indicators point toward a possible breakout. If Bitcoin holds above its current support levels, a move to test the major trendline resistance around $83.5K is highly likely

Understanding the Falling Wedge Pattern

The falling wedge pattern is often regarded as a bullish setup, especially when coupled with rising momentum indicators like the RSI. In Bitcoin’s case, the falling wedge began forming after the cryptocurrency reached recent highs. Consequently, the price has been making lower lows, but the RSI has been trending upward. This bullish divergence indicates that, although Bitcoin’s price is declining, underlying momentum is strengthening.

Moreover, the falling wedge pattern has historically preceded upward price movements. Bitcoin’s pattern suggests that the downward trend may be losing steam. Traders are keenly watching to see if Bitcoin can break above the resistance trendline that currently hovers around $83.5K. A successful breakout could lead to a sharp upward move, testing higher price levels in the near future.

RSI Bullish Divergence Signals a Possible Reversal

The RSI shows a clear bullish divergence, moving higher despite Bitcoin’s price continuing to drop. This indicates that the selling pressure is starting to ease and that buying momentum may soon return. When the RSI diverges from the price in this manner, it often signals a potential reversal in the market.

Additionally, RSI values in this context suggest that Bitcoin is nearing oversold territory, which further supports the possibility of an impending trend change. The strength of the RSI's upward movement could fuel further optimism for traders seeking a reversal. If Bitcoin breaks its current downtrend, the bullish divergence combined with the falling wedge pattern could drive prices higher.

What’s Next for Bitcoin?

Bitcoin’s next move will depend largely on its ability to hold above key support levels. If Bitcoin successfully retests the major trendline resistance around $83.5K, it may open the door for more upward movement. Traders and analysts are focused on monitoring these levels closely as they could determine the direction of Bitcoin's next significant move.

The bullish divergence in RSI continues to suggest that Bitcoin could experience a breakout, leading to higher levels. Market participants are awaiting confirmation, but the current technical setup points toward potential growth. With the falling wedge pattern still intact, Bitcoin may be gearing up for a significant shift in direction, but the key to this will be a breakout from the $83.5K resistance level.